A company may choose a skimming strategy during the introduction stage of its product to help recover costs of development and/or to

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Skimming strategy involves setting a high price for the new product during its introduction stage to recover the costs of development. This is usually done when the early buyers are willing to pay a premium price for the new product due to their perceived value of it. A skimming strategy is appropriate when the early buyers are price insensitive, and the company can use this opportunity to recover costs quickly before competitors can introduce similar products.

A Company May Choose a Skimming Strategy During the Introduction